Being an executive of an oil and gas company and trying to navigate the global energy transition, geopolitics, and volatile oil pricing is difficult enough. Trying to do it all with an outdated, costly and customized ERP system is next to impossible.
Many oil and gas companies across the globe have ERP systems that were first installed during Y2K—which is now over 20 years ago. All that these companies wanted in their ERP were the following: 1) a global instance, 2) a simple process, and 3) a system they could operate at a lower cost.
None of the above was achieved.
Instead, over the last 20 years, oil and gas companies have embarked on extensive modifications, massive customizations, and costly upgrades that introduced even more complicated data entry and business processes. This legacy software was not limited to one area of the business. In fact, it covered the whole portfolio including accounts payable, HR, supply chain, work permitting, material handling, and logistics management.
The 20 years of customizations did not make these companies more efficient, either; in fact, they did the opposite. Extensive customizations made it slow, difficult, and costly to adopt new features in any of the above areas. Oil and gas companies have invested substantial time and effort to perform annual (and sometimes bi-annual) technical upgrades. The cost for this privilege? Billions. And here’s the best part: The future using these same legacy systems? Even more billions.
There is an alternative that can support your next big move, whatever it happens to be. Three leading oil and gas companies are now actively looking at it. Who is it? It’s Oracle.
Oracle—with its headquarters in the energy-producing friendly state of Texas—is actively collaborating with leading oil and gas companies around the globe to modernize their ERP and support their next big move. Will you be the next one?
Several leading oil and gas companies are making four big moves:
These companies are taking advantage of the opportunities of a leading cloud ERP system to get timely, accurate information into the hands of decision-makers—facilitating enhanced, real-time decision making and business course correction where required, as well as staying ahead of trends. Additionally, these companies want their employees to have more time to focus on strategic projects and initiatives, such as exploring innovative business models and streamlining M&A activities.
The oil and gas industry has always been about M&A and divestures. 2020 and 2021 have been among the most active M&A periods in years. In the rush to buy and sell, however, finance must act with precision: identifying the best M&A targets, creating new divisions, modeling the impact of divestitures, and integrating new companies, systems, and employees. A critical and often overlooked question CFOs need to ask is, “How can we assimilate new data and processes to have a single, trustworthy source of financial truth?”
Big moves such as making an acquisition can cause delays and inaccuracies in your financial close, especially if you’re still using manual finance processes. A manual close can also prevent quick shifts and delay marketplace success, because it slows the process of reporting results to external stakeholders who need to understand the health of your business.
Cloud-based solutions featuring machine learning and intelligent process automation can help you close the books faster, and—perhaps most critical in uncertain times—they’re flexible enough to accommodate change, effortlessly. Imagine that you’ve created a subsidiary as a result of an acquisition, and suddenly, you need to do calculations on a minority interest. The right cloud software will have an automated calculation for this. You just turn it on and get instant results, with no help needed from IT or an outside consultant.
The same moves that enable growth and transformation can also put a company’s most critical and sensitive data at risk. Acquisitions increase a company’s data, and the expansion of IoT, mobile, and other digital technologies create new access points and chances for that data to be compromised. How do you manage risk in an era of data proliferation? It starts with a well-integrated risk management approach to security, risk, and compliance to ensure that any structural or business model changes won’t introduce new risks that can negatively impact your brand’s reputation or bottom line.
It continues with creating a risk-intelligent culture that empowers business process owners to identify and prevent risk, strengthening risk-based decisions and executive oversight. Adding new companies, subsidiaries, and business models can provide an opportunity to centralize and automate your security and audit. Finance leaders are realizing they need to have a risk-intelligent culture; the gold-standard is to have this from day one, to protect critical ERP and other sensitive data. This means managing risks at the beginning of a cloud ERP implementation, not afterward, and having embedded risk-assessment activities in your financial software.
The pressure on oil and gas companies to do more with less has never been greater. Financial scorekeeping is no longer the core responsibility. Successful oil and gas teams must operate as strategic business partners, bringing data driven insights gleaned from advanced analytics and predictive modelling.
Oracle’s Finance Modernization for Oil and Gas solution offers digital innovation to automate transactional processing and enable strategic, actionable insights.